Nepal VAT Registrations Explained

Updated 2 months ago

Once you have determined that you are required to register for VAT in Nepal, this article will walk you through what the registration process looks like and what you should expect.

Registration Authority

All VAT registrations in Nepal are handled by the Inland Revenue Department (IRD), which operates an online registration portal. Non-resident businesses use the same IRD portal and must obtain a Permanent Account Number (PAN) during registration.

Available Registration Schemes

Nepal offers two registration schemes. Only one can apply at a time — they cannot be used simultaneously.

Scheme 1: Standard VAT Registration

This is the primary registration scheme for businesses with a physical presence in Nepal or for those that qualify under the standard domestic VAT rules.

Feature	Details
Who qualifies	Resident and non-resident businesses conducting taxable activities in Nepal
Supplies covered	All supplies: B2B and B2C, goods and services, domestic and cross-border
Input tax credit	Yes — full input VAT recovery on purchases related to taxable activities
Filing currency	NPR (Nepalese Rupee)

Scheme 2: Non-Resident Registration for Digital Services

This is a simplified electronic VAT registration designed for foreign providers of digital or electronic services that have no place of business in Nepal and supply services to Nepalese consumers (B2C).

Feature	Details
Who qualifies	Non-resident businesses supplying digital services to Nepalese consumers
Supplies covered	B2C only (B2B sales are handled by the buyer under the reverse charge mechanism)
Input tax credit	No
Filing currency	NPR (Nepalese Rupee)

Which Scheme Applies to You?

Non-resident SaaS seller (B2B customers only): No VAT registration required if your revenue is below NPR 3 million, or if the reverse charge mechanism covers all B2B supplies. Your Nepalese B2B customers self-assess and pay 13% VAT. DST does not apply to B2B transactions.
Non-resident SaaS seller (B2C customers): Register for both VAT (13%) and DST (2%) once your annual B2C digital services revenue to Nepal exceeds NPR 3,000,000.
Non-resident with a permanent establishment (PE) in Nepal: Standard VAT registration is mandatory regardless of threshold.

Filing Frequency

Business Type	Filing Frequency	Deadline
Nepal-based taxpayer (annual turnover above NPR 10 million)	Monthly	Within 25 days of the following month
Nepal-based taxpayer (annual turnover below NPR 10 million)	4-monthly	Within 25 days following the period end
Non-resident providing digital services	Monthly	Within 25 days of the following month

Note: If the 25th day falls on a public holiday, the filing deadline shifts to the next working day.

Payment Requirements

Local bank account: Non-residents are not strictly required to have a Nepalese bank account to pay VAT, although guidance on international payment channels is limited. Payments can generally be made through the IRD's online portal or via designated international channels.
The IRD's online portal accepts payments from non-resident businesses.

DST Filing (Non-Residents)

The Digital Services Tax (DST) is filed annually, within 3 months of the end of the Nepali fiscal year. This is separate from your monthly VAT return.

First Filing Period

Your first VAT return covers the period from your registration date to the end of that month. Only transactions completed after your registration date are included in your first return.

Kintsugi handles Nepal VAT registration on your behalf. Once you are eligible, our team will guide you through the process and ensure you are set up correctly in the IRD system.

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